FCC Says 30M Americans Experience Mobile 'Bill Shock'

Ever had an unpleasant surprise when opening your cell phone bill? Apparently, you're not alone. The Federal Communications Commission on Wednesday released a study that said 30 million Americans, or one in six mobile users, have experienced "bill shock," or an unexpected increase in their monthly bill.

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Ever had an unpleasant surprise when opening your cell phone bill? Apparently, you're not alone. The Federal Communications Commission on Wednesday released a study that said 30 million Americans, or one in six mobile users, have experienced "bill shock," or an unexpected increase in their monthly bill.

The mobile industry quickly responded to say that it was troubled by the direction the FCC is taking with respect to the wireless industry.

Of the 3,000 people surveyed last month by Abt/SRBI and Princeton Survey Research Associates for the FCC, about 2,400 had personal cell phones. Of that number, 17 percent said that their personal cell phone bills have increased from one month to the next, even though they did not change their plans.

Taking into account the number of people with mobile phones in the U.S., this translates into 30 million Americans, the FCC said.

Of those who have experienced "bill shock," about 88 percent said their provider did not contact them after their bills increased, and 84 percent said their carrier did not warn them that they were about to exceed their allowed minutes, texts, or data downloads.

Bill increase amounts varied widely, the FCC said, but more than a third said their bills jumped by at least $50, while another 23 percent said the fee was $100 or more.

The commission also found that many people are not aware of the early termination fees (ETFs) associated with their accounts. Of those with cell phones, 54 percent said they would be responsible for an ETF if they cancelled their contracts, and 18 percent did not know. Of those subject to ETFs, 43 percent said it was $150 or more and 47 percent had no idea, citing confusing bills.

Respondents said that these ETFs, which can range from $150 to $350 depending on your carrier or mobile device, are one of the things keeping them from switching providers even when their service is not ideal. About 43 percent said they stay with their current carrier because of the ETFs.

Wednesday's results are part of an FCC effort to investigate bill shock. The commission announced earlier this month that its consumer task force is looking into the issue, and asked stakeholders to submit comments on the subject. The FCC said it was considering a plan that would require carriers to send text messages when users are running up roaming charges or are close to hitting their data limit, a process that has been in use in the European Union since June 2009.

CTIA, which represents the wireless industry, said the study's release highlights a bigger problem  the FCC's focus on an industry that CTIA says is thriving without regulation.

"I am very troubled with the current direction the FCC is taking with respect to the wireless industry  from the messaging sent last week in the Mobile Competition Report to today's survey release," CTIA president and CEO Steve Largent said in a statement. "It seems the commission is going to attempt to micromanage what is an incredible array of choices for consumers. From prepaid to postpaid, subsidized handsets to unsubsidized, contracts with ETFs to those without, large, medium or small buckets of minutes and 'all-you-can-use' plans, consumers have an unbelievable range of choices. Contrary to the statements in the press release, the industry does provide 'simple and easy to understand' plans for every type of American consumer."

Largent said actual bill shock comes in the form of government taxes.

"If the FCC is interested in controlling 'shock' on consumer bills, they should address the most egregious part of consumers' bills, which is the almost 16 percent rate of taxes and fees imposed by federal, state and local governments on wireless consumers," he said.

Chloe Albanesius has been with PCMag.com since April 2007, most recently as Executive Editor for News and Features. Prior to that, she worked for a year covering financial IT on Wall Street for Incisive Media. From 2002 to 2005, Chloe covered technology policy for The National Journal's Technology Daily in Washington, DC. She has held internships at NBC's Meet the Press, washingtonpost.com, the Tate Gallery press office in London, Roll Call, and Congressional Quarterly. She graduated with a bachelor's degree in journalism from American University...
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